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Monday, 4 March, 2002, 05:35 GMT
Ansett shuts up shop
Ansett logo and trolleys
Ansett kept flying post-bankuptcy, but never truly revived
Australian airline Ansett has made its last flight, after administrators gave up all hope of patching together a rescue deal.

The firm, which filed for bankruptcy in mid-September, is now preparing to auction off its assets.

The list includes 133 planes, 10 million spare parts, terminals and other buildings, including its Melbourne headquarters.

Until the middle of last week, the sale of Ansett to businessmen Lindsay Fox and Solomon Lew was on course. But the pair pulled out of the deal last Wednesday.

British billonaire Richard Branson, one of a handful of firms previously reported to be interested in reviving Ansett, said his discount airline Virgin Blue would look to employ up to one-third of Ansett's 3,000 staff.

Although Ansett has been kept flying by its administrators, but a deal to rescue it as a going concern now seems impossible.

Government dodges the blame

The Australian government has shrugged off allegations that it was to blame for the failure.

The government's refusal to make major financial concessions lay behind the decision of Mr Fox and Mr Lew to walk away.

Transport Minister John Anderson insisted the government made every effort to help resurrect the airline, but said the Fox-Lew deal would have cost hundreds of millions of taxpayers' dollars.

"The government was left in no doubt we were being asked to consider very large amounts of money," he said.

The Fox-Lew consortium wanted the government to underwrite a 65% load factor, meaning support payments should bookings drop below 65% of capacity.

Other concessions included relief from withholding tax on aircraft lease payments for five years, and accelerated depreciation allowances.

Rivals remain calm

Meanwhile, Australia's remaining airlines insisted that they would not be unduly exploiting the gap in the market left by Ansett.

Both Virgin and main carrier Qantas vowed to keep air fares competitive, and Australia's competition watchdog denied that it was seeking to cap Qantas' ticket prices.

Qantas said it did not expect a quick profit boost from the demise of Ansett.

"It certainly won't have any difference on the bottom line this financial year because we've factored in the fact that they were going to be very weak competition for the next three months," Qantas chief executive Geoff Dixon told the Nine Network's Business Sunday programme.

Tom Ballantine, Orient Aviation magazine
"This raises a big problem for the global Star Alliance"
See also:

28 Feb 02 | Business
New rescue hopes for Ansett
10 Feb 02 | Business
Ansett orders Airbus planes
08 Nov 01 | Business
Ansett finds a buyer
27 Sep 01 | Business
Ansett returns from bankruptcy
17 Sep 01 | Business
Ansett administrator quits
16 Sep 01 | Business
Ansett workers offered some hope
14 Sep 01 | Business
Protests as Australia airline fails
11 Sep 01 | Business
Qantas poised for airline deal
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